Saudi mining major Ma’aden and Bahrain’s Alba call off aluminium business merger plans

The companies had started discussions for a potential deal in September

Ma'aden said it will continue to grow its aluminium business. AFP

Saudi Arabia Mining Company (Ma'aden) has discontinued discussions to merge its aluminium business with Aluminium Bahrain (Alba), one of the world’s largest aluminium smelters outside of China.

“Ma’aden will continue to pursue its strategic growth agenda for its aluminium business, ensuring sustainable and impactful development regionally and globally,” it said in a filing to Tadawul on Monday.

No further details were disclosed.

The two companies had signed a non-binding agreement to begin due diligence on a potential business combination involving Ma'aden’s aluminium business unit in September.

The merger, if it would have taken place, was expected to reshape the global aluminium industry, positioning the merged entity as “one of the largest aluminium producers worldwide”, Alba said at the time.

The proposed structure would have involved Ma’aden contributing the entire share capital of two of its subsidiaries, Ma’aden Aluminium Company (MAC) and Ma’aden Bauxite and Alumina Company, along with contractual rights concerning the marketing and sale of products produced by MAC, to Alba. In exchange, Alba would have issued new shares to be allotted to Ma’aden.

As part of the discussions, the companies had also considered the potential cross-listing of Alba on the Saudi Exchange.

In September, Ma'aden also agreed to acquire Sabic’s 21 per cent stake in Alba.

The hydrocarbon-rich Gulf states are focusing on low-carbon metals manufacturing as part of their economic diversification strategies. The region is a global leader in aluminium production, accounting for about 10 per cent of output. Nearly a third of the Gulf's aluminium production is exported to the US and the EU.

The lightweight metal has gained importance in recent years, particularly for its use in battery casings and other components for electric vehicles.

Demand for aluminium semi-finished products is forecast to grow by 3.7 per cent globally this year, according to consultancy Cru.

“Interest rate cuts and economic recovery will drive growth later in 2025 after two years of demand decline in Europe, supported by real income increases amid decreasing inflation, boosting construction and transport,” Fitch Ratings said in a December report.

These sectors, along with packaging, will also gain momentum in North America, it added.

Global primary aluminium production is estimated to increase to 73.8 million metric tonnes this year, up from 72.6 million tonnes last year, the report said.

“In the medium-term, the energy transition will drive robust PV installation growth in China, India and the Middle East. The transport sector will outperform others as EVs gain more market share and increasingly adopt aluminium for enhanced efficiency,” the ratings agency said.